India Quashes Taxes on Low-Grade Iron Ore Amid a Global Slowdown in Demand

Due to a substantial drop in the Iron ore exports and prospects of noticing further drops, India quashes export taxes on iron ore lumps and fines on iron ore with below 58% content. This was done to reverse an order that was passed in May when it had raised the tax to a steep 50% to ply to the soaring inflation.

The government also went forth to remove a 15% export tax levied upon steel intermediaries, imposed in May. Furthermore, in a consecutive move, the government also lowered the tax on Iron ore concentrates other than roasted iron Pyrites From 50% to 30%.

The impetus behind the moves was the languishing demand from china; another precedent in the whole case that forced the government to lower the taxes was the domestic markets increased dependence upon High-grade iron Ore only.  And producers of low-grade ores largely depending upon the overseas market.

India's finished steel exports more than halved during the first 7 months of the fiscal year that began in April 2022. According to an insight provided by the JSW steel manufacturer, exports are to fall to an over five-year low in 2022/23. Two of the primary reasons behind the fall were a reduction in global demand due to an economic slowdown and the high import taxes levied by the government.

Some of the fastest-growing markets for Iron ore in India between 2019 and 2020 were China ($1.59B), Indonesia ($54.5M), and Malaysia ($28.7M). Major exporting competitors of iron ores were Australia $79.6 B, Brazil $26.5B, and Canada $ 5.73B.

According to published data India's country-wise iron and steel Exports were as follows.

• ·    United States – 510.87 INR billion
• ·    Unites Arab Emirates – 183.70 INR billion
• ·    Netherlands – 133.18 INR billion
• ·    Singapore ­– 119.78 INR billion
• ·    South Africa – 86.94 INR billion
• ·    South Africa – 86.94 INR billion
• ·    China – 84.18 INR billion
•     Saudi Arabia - 83.88 INR billion.
• ·    Honk Kong – 72.05 INR billion
• ·    Germany - 64.03 INR billion
• ·    Brazil - 61.85 INR billion
• ·    France – 56.52 INR billion
• ·    Nigeria – 55.64 INR billion
• ·    Nepal – 51.69 INR billion
• ·    Belgium – 51.61 INR billion
• ·    Italy - 50.76 INR billion
• ·    Israel- 46.94 INR billion
• ·    Indonesia – 46.22 INR billion
• ·    Japan – 41.70 INR billion
• ·    Thailand – 41.54 INR billion
• ·    Egypt – 35.59 INR billion
• ·    Malaysia – 34.38 INR billion
• ·    Australia - 32.11 INR billion
• ·    Sri Lanka - 31.16 INR billion
• ·    Spain – 28.48 INR billion

Contraction of demand in the prime markets or Indian iron ore, including China, showcased a 70% drop in exports from April till July 2023. Other markets, such as Korea, showcased a 77?ll; Brazil showcased a fall of about 26%, and Indonesia 14%. Other than these countries, Indonesia showed a decrease of about 14%, Italy 16%, Nepal 23%, Oman 84%, and Vietnam 37%. To help the falling imports due to the overall recession in market demands, India has come forth to reduce the taxes in an approach to help the exports. A sharp fall was noticed from June onwards; data showcased that there was a 94?ll in the exports in June, 0.21 Mt versus 3.5MT exported for June 2021.

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